11 Mar What Property Can I Keep If I File Bankruptcy?
When you file for bankruptcy, you are discharged of all of your personal liability for your debts. This allows you to get a fresh start, free from all or much of the debt you are unable to pay.
In exchange for your discharge, in Chapter 7 bankruptcy you give up all of your assets; well not everything, but everything over the amount you can keep.
- So the question people have is, how much can I keep if I file for bankruptcy?
The answer to this question varies from state to state, and will also depend on how long someone has lived in the state that their bankruptcy case was filed in. The law says that if you have lived in the filing state for at least two years, you use that state’s exemptions. However if you have lived there less than two years, it will depend on where you lived before. (It is complicated, and you need to discuss it with a lawyer!)
Where someone lives and how long they have been there will determine what exemptions apply in the case.
Exempt property is property that someone can keep if sold, or through and after bankruptcy. Non-exempt property is what can be seized and sold by creditors or the bankruptcy trustee to pay debts that are owed.
- What if you have property above the exemptions?
If someone has non-exempt property and they don’t want to lose it, then there may be a way to keep it. If they can pay the required payments for a Chapter 13 bankruptcy case, they can keep property over the exemption. As long as they pay in at least the value of the non-exempt property through monthly payments, they can keep the property and the creditors will get the money.
In order to know what is exempt in your state and in your situation, you need to speak to a bankruptcy attorney who can tell you what laws apply.
Don’t rely completely on exemption amounts you might find on the Internet because many web sites are wrong and/or contain outdated information. Some show only the major exemptions, but omit lesser known exemptions that are valuable in protecting assets.
To be sure what the exemptions are from your state, and determine which exemptions apply to you, you should contact an attorney who is licensed to practice law in your state and who is experienced and understands exemptions and how they apply if you file Chapter 7 or Chapter 13.
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